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Electronic pull-tabs distributor paints rosy picture of launch

Electronic pull tab gambling has been up and running for 30 days in Minnesota. It's too early to tell to judge the program's success. But officials and the company selling the games say they're off to a strong start.

The state is counting on taxes from the games to raise as much as $70 million a year, much of that earmarked to pay for a new Vikings stadium. And on Tuesday night, George Ficocello was doing his part, playing one of the games at Mancini's Char House and Lounge in St. Paul.

"I just lost 20 bucks," he said. "I don't have any money left on it right now."

Truthfully, that's kind of what Minnesota's been hoping for. That 20 bucks is money Ficocello might not have spent without a reboot of the charitable gambling industry.

"I'm not a big pull tab guy," he said. "This is more like going to the casino, so it's a little more fun than the other."

That's the kind of scene that's been playing out across the state in the last month. From a start at a mere handful of bars, there are now about 160 of the electronic pull tab games blinking away on iPads at bars around Minnesota.

"We're up to 39 charitable gaming locations that have the capacity to do electronic pull tabs," said Tom Barrett, executive director of the Minnesota Gambling Control Board. "That's out of a potential pool of 2,800. But so far, so good. The problems have been minimal, so in that respect, regulatory oversight, we're pretty pleased with what we've seen thus far ."

Barrett also said it looks like the games are drawing in new business, and not just taking market share from existing pull tabs. Barrett says he's checked in with one of the bigger operations with both paper and electronic games.

"They said paper sales increased. Now, I find that interesting, because some of our projections were, our anticipation was we might see some decrease in the paper. In this particular instance there's an increase. Now don't take that to heart too long, but that's a good indication," he said.

The owner of the game's distributor, Minneapolis-based Express Games, says the numbers he's seeing are positive, as well. Jon Weaver didn't want to discuss exact revenue, but said so far, his games are beating the odds.

"They're well above what the state's projected on a per-device basis. And they're above our projections, and our projections were more aggressive that the state's. So we see that as a good indication of player satisfaction," he said.

That state projection was $225 a day in sales per machine, and the state thinks there will be more than 4,000 of the electronic pull tab and linked bingo devices up and running eventually. That's how they came up with the additional $1.3 billion in revenue they're counting on to pay the mortgage on a new stadium.

Weaver says he thinks signs are good the games will grow. He's got a waiting list of more than 100 bars and restaurants that want his iPad games. The gambling control board approved seven new versions of the pulltabs Tuesday, and he hopes to get a mini version of the games -- based on an iPod touch, about the size of an iPhone -- approved in November.

"We're working out some bugs, as it relates to both the software system and our installation process. You learn a lot as you go along, so it's been a learning curve for us," he said. "We're expanding, but we're feeling very comfortable about the revenues that we're receiving and the quality of the installation and the reliability and security of our games and system."

But not everybody's convinced. Even some of the games' prospective makers are still wary about the state's sales projections.

"Some of the budget estimates that have been put on this product might be a little bit optimistic, because it's never been tried before," said Scott Henneman, a vice president at International Gameco, an Omaha based manufacturer that already sells paper pull tabs. Gameco is getting ready to compete with Express Games, for now the sole supplier of electronic pull tabs.

"Possibly, this will entice players that don't want to play paper. But I think to double it, more than double what paper's been doing, is very optimistic," he said.

Still, that isn't stopping Gameco from trying. They've submitted their own machine -- one with both electronic pulltabs and bingo -- for approval by the state gambling control board.